Industry Comment

UK electronics manufacturing: why the road to recovery starts at home

By John Cameron, managing director of CB Technology I

n a rapidly short period of time, the dual pressure of the global pandemic and Brexit have dramatically reshaped the way the UK electronics manufacturing sector does business.

These complexities have exacerbated global supply chain delays across the industry, including the challenges faced by Original Equipment Manufacturers (OEMs) and Electronic Manufacturing Services (EMS) companies who find themselves faced by rising costs, lengthy delays and a shortage of vital components.

As a result, businesses are beginning to question the fundamental risk and reward of globalisation. They must now prepare for the reality of long-term disruption, turbulent geopolitics and an inevitable rise in economic nationalism as countries around the world look to kickstart their own economies post-pandemic.

So, what does this mean for the industry?

OEMs are having to broaden their considerations with regards to how they handle not just existing business, but the way in which they approach new projects. For EMS companies, who pride themselves on effectively being an extension of customer OEM organisations, the value of market research, monitoring and strong supplier relationships has never been more apparent. Those already equipped with a focused plan that accounts for extended material lead times, securing critical and single-sourced parts and building strategic buffer stocks

have been able to survive and compete. Those less prepared haven’t been as fortunate. The global supply chain continues to be disrupted by fresh Covid outbreaks in South East Asia and trade-deals with some of our biggest neighbours are still yet unsigned. The view is that the ‘new normal’ will remain for at least the next 12 months - if not longer still. As a consequence, OEMs are beginning to ask themselves whether they should be sourcing products closer to home and, more importantly, whether this can be done without compromising on price, as well as quality and delivery.

On-shoring and localisation present great opportunities for progressive UK electronics manufacturers with the ambition to innovate and compete. Whilst the global supply chain is clearly not over, OEMs have learned it can be quicker and smoother to use local manufacturers in the current circumstances. It’s now up to EMS companies to find creative solutions to tackle these macro- level challenges and position themselves to support the changing needs of OEMs. There is a striking opportunity not only to meet immediate demand but to secure long-term custom that extends beyond the immediate impact of the pandemic and Brexit, with benefits such as increased flexibility, reduced risk and significantly shorter delivery times.

Indeed, progressive companies will already be setting themselves to demonstrate to OEMs that they have the required capacity, capability, cost competitiveness and structure to support their requirements. Addressing these immediate business challenges and implementing a roadmap focused on the creation of a sustainable, collaborative relationship will be key to the sector’s ongoing success.

Looking to the future

With the UK continuing its recovery following the pandemic, the electronics manufacturing industry remains an integral part of the economy and is well placed to support a number of vibrant sectors which will require a strong manufacturing base at home to drive economic growth.

As the biggest independent EMS company in Scotland, CB Technology is particularly pleased to see the space industry’s unprecedented growth North of the border. With more than 80 leading space companies headquartered across the country, the value of the sector is expected to exceed £4 billion by 2030.

There has also been a spate of technology breakthroughs in the sensing, imaging and IoT technology sectors, with facilities such as the Censis Innovation Centre at Glasgow University stimulating a new wave of startups. Innovation hubs like these and at other

40 July/August 2021 Components in Electronics

universities will play an important role in ensuring that the sector continues to flourish in the coming years across the whole of the UK. In a further key area of growth, the use of sensing technology in condition monitoring and industrial control is sharply on the rise as technology becomes more accurate and robust. Ruggedised sensing and transmission technology - which can highlight potential system overload or failure, reducing costs and safeguarding engineers - promises to be a critical part of UK electronics manufacturing as the industry continues to develop over the coming decade.

Progressive EMS companies are well placed to support thriving industries like these and others through early-stage alignment and proactive engagement and they offer huge promise to secure long-term success and security, post-pandemic.

The industry is already showing

encouraging signs that it can and will bounce back swiftly from the events of the last 18 months, as economic conditions around the world begin to improve and demand for manufacturers’ goods grows stronger. Now is the time to seize with both hands the opportunities created by the changing dynamics of globalisation and ensure British manufacturing is at the heart of the industry’s road to recovery.

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